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Toyota cars can increase prices or keep prices down to ensure profits

According to Reutersreported a 33% drop in Toyota’s fourth-quarter profit (Toyota takes the fiscal year from April of the previous year to March of the following year), the share price of the Japanese “giant” also fell 5% in today’s trading session. 11-5, the biggest one-day drop in the past two months.

Toyota cars can increase prices or keep prices down to ensure profits - Photo 1.

Notably, Toyota predicts an “unprecedented” increase in raw material costs, which could cut the Japanese automaker’s full-year profit. This is seen as a clear sign that the world’s leading automaker has not been able to overcome the input crisis that has shaken the global auto industry.

The Corolla manufacturer predicts that raw material costs will more than double to $11.1 billion in the fiscal year starting April 2022. They plan to solve this by “reducing the amount of materials as much as possible”, and “switching to use lower-cost materials”, according to chief financial officer Kenta Kon.

This may lead to the possibility of increasing the price of Toyota cars in the future, or keeping the selling price unchanged but lacking features and options / reducing “premium”.

Toyota’s difficulty is a popular brand, where customers are very price-sensitive, according to chief technology officer Masahiko Maeda.

Toyota had performed well in previous months during a global chip shortage, thanks to its large chip stockpile, but now it has suffered the same fate as its rival, having had to cut production as the crisis dragged on. length, as well as China’s COVID-19 social distancing regulations.

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